Top Glove set on being top in the trade

Malaysian entrepreneur Lim Wee Chai made his first foray into the business world by selling air-conditioners at the age of 24.

Three years later, he upgraded himself with a Master of Business Administration from Sul Ross State University in Texas.

"I learnt a lot selling air-cons in those early years, and the MBA helped me understand how to manage a business," recalled Dr Lim, 58.

Those marketing skills, coupled with his physics know-how, inspired Dr Lim in 1991 to set up Top Glove Corporation with his wife Tong Siew Bee.

"My wife and I wanted to start a business together," said Dr Lim, who went on to obtain his PhD in management from the University of Selangor last year.

"Medical gloves commanded good margins, and the healthcare sector was showing strong growth. We decided glove manufacturing was the right industry for us."

At the time, the company had one factory and three production lines.

"We started with very little capital, and we were the smallest player in the sector," Dr Lim said.

Today, Top Glove is the world's largest rubber glove manufacturer with a 25 per cent global market share. It has a total of 25 glove factories in Malaysia, Thailand and China, with 484 production lines and an output of 45 billion pieces per annum. It also owns two latex-processing plants in Thailand that supply 60 to 70 per cent of its latex needs.

SUSTAINED RESILIENCE

Listed on Bursa Malaysia in March 2001, Top Glove has a market capitalisation of RM6.3 billion (S$2.1 billion). Over the past 15 years, the glove maker has expanded its revenue and profit after tax by a compound annual growth rate (CAGR) of 25 per cent and 29 per cent respectively.

Dr Lim and his family own about 38 per cent of the company.

Top Glove kicked off its secondary listing on the Singapore Exchange on June 28. As no new shares were issued, Dr Lim and his associates have pledged to sell at least $20 million of existing Top Glove shares over the next 12 months to create liquidity and trading activity on the SGX.

Dr Lim, who has served as Top Glove's executive chairman since 2000, expects steady growth of 6 per cent to 8 per cent a year in global glove demand. "With rising standards of living, improving standards of health, and increasing life expectancy, demand for gloves will remain resilient," he added.

But competitive pressures are also increasing in tandem with higher sales, Dr Lim admitted. To maintain its edge in the industry, Top Glove aims to continue producing high-quality gloves at lower cost.

"Any business with strong demand will invite competition, and new players are increasing all the time. When supply outstrips demand, our margins will get hit, so our priority is to control costs and boost production efficiency," he added.

As a result, the company intends to automate as many of its manufacturing processes as possible.

The company is also beefing up its research and development (R&D) investments, and plans to double the number of R&D staff this year to 100. It has filed 20 patents in Malaysia over the last two years - two have been granted, while the rest are pending.

UNWAVERING CONSISTENCY

For Dr Lim, perseverance and staying focused are of paramount importance.

"Performance and discipline are extremely important values in our company - discipline helps us perform consistently. Without these values, we cannot produce good results," he said.

Dr Lim tries to instill these qualities in both his staff and children. His son, 29, has taken on marketing and manufacturing roles in Top Glove over the last five years. His daughter, 22, is graduating with a degree in international business this year.

"If you are in good health, you can make good decisions and contribute positively to the company and the community. But when you fall ill, it becomes a liability," he added.

"That's why it's important to have a good diet, rest and exercise - this is where discipline comes in."

Dr Lim, who believes in leading by example, has a highly organised daily routine - he exercises at least five days a week and tries to be in bed by 11.30 every night.

"If I am up past 11.30, it's because my staff send me too many e-mails, and every e-mail is urgent!" he said with a chuckle.

Each morning, Dr Lim stretches for 10 minutes before starting his day. He also attends yoga classes once a week, and plays badminton and golf twice a week.

"Work is my hobby, and exercise is my duty - I cannot say I have no time, because health is my wealth," he said, beaming.

To that end, Dr Lim regularly plays a sport with his wife, 57, who is an executive director in Top Glove.

"I prefer playing badminton with her, because I am better at it and she usually loses to me. If we play table tennis, I end up losing to her," he dead-panned.

That healthy lifestyle motto has become embedded in the company's culture.

Top Glove employs five dietitians and nutritionists to manage the health of its workforce of 10,000, and spends RM400,000 a year supplying staff with dental kits to promote oral hygiene.

Workers are encouraged to brush their teeth and clean their tongues three times a day. They also have to take a body mass index (BMI) test every quarter, and their scores are monitored to encourage them to adopt healthy habits.

"Once you are healthy, you will be able to make positive contributions and, then, every day will be a good day," Dr Lim said.

STARK SIMPLICITY

Other values Dr Lim holds dear to his heart are encapsulated in Top Glove's business principles. The rules are starkly simple: Do not lose our temper, do not lose our health, do not lose our shareholders' money, do not lose our customers.

"Again, it's all about discipline and self-control. If we lose our temper, we're likely to make mistakes or bad decisions, so getting angry is not good," Dr Lim said.

"As managers and leaders, we make many decisions. If we make mistakes often, it will cost the company money, and could even result in the loss of lives in the factory."

Dr Lim's indefatigable optimism and drive are evident in Top Glove's ambitions - it has set its sights on becoming the world's largest nitrile glove manufacturer.

Nitrile, a synthetic rubber, is safe for those allergic to latex. It is also resistant to a wide range of chemicals, and is the most durable form of disposable gloves on the market.

"Market demand for nitrile gloves is increasing, mainly from the healthcare sector and developed markets, such as US, Europe and Japan," he said.

"We are looking at ways to improve the manufacturing and costing process of our nitrile gloves."

The company will continue to pursue organic growth, as well as suitable merger and acquisition opportunities.

By 2020, the company aims to raise its share of the global glove market to 30 per cent, from the current 25 per cent.

That could be a challenging target, Dr Lim admitted. "But in business and in life, we must always set a target, and work towards it.

"For myself, I have set a personal target to live to a hundred - that's why it's so important to stay fit and healthy, every day!"

This is an edited excerpt from the Singapore Exchange's Kopi-C: The Company Brew column that features C-level executives of firms listed on SGX. A longer version can be found on SGX's My Gateway website: www.sgx.com/mygateway

A version of this article appeared in the print edition of The Straits Times on July 04, 2016, with the headline 'Top Glove set on being top in the trade'. Print Edition | Subscribe

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